Sanity check: How much will the iPhone impact IT and business users?

Although the iPhone is primarily a consumer electronic device, it will likely be adopted by plenty of business users and could have a larger impact on mobile computing for both consumers and enterprise users, as TechRepublic's Jason Hiner explains.

Issue: iPhone impact on the enterprise

Make no mistake, the iPhone is a consumer electronics product. It's an uber-phone aimed at digital enthusiasts who want to use their phone to have a better Internet and computing experience on the go. Of course, no one wants and needs a better mobile computing experience than business users. That's why the iPhone could quickly spill over to have a significant impact on businesses.

In its research note titled "How to Plan for User Interest in the Apple iPhone," Gartner even went so far as to estimate that the total cost of ownership (TCO) of supporting the iPhone will be double the TCO of supporting the BlackBerry or Palm Treo.

Sanity check

Gartner has a few valid points, especially in relation to cost and Apple's lack of focus on the enterprise, but I think several of the other issues are not nearly as critical as Gartner has indicated. Here's my rundown of those issues:

Security: All smartphones are a security risk, but I haven't seen anything to indicate that the iPhone is any more risky than a BlackBerry or Treo.

Mobile e-mail: Sure, the iPhone won't connect to BlackBerry or Good Mobile Messaging (which connects most Treos), but it looks like Apple will be licensing ActiveSync so that the iPhone can connect to Exchange servers. Since BlackBerry and Good are essentially middleware for connecting to Exchange in most cases, the iPhone would have virtually all the same functionality without the need for BlackBerry or Good servers on the backend.

Backup: I doubt that many smartphone users do regular backups or even work on many files that need to be backed up. The only real data that needs to be backed up from most smartphones are contacts, calendar, and messaging, and if the iPhone has Exchange ActiveSync, that will take care of most of that data from a business perspective. Otherwise, the iPhone will have to rely on desktop sync, just as other smartphones do. The one disadvantage the iPhone does have in regard to backup and storage is that it does not have a memory card slot.

I expect iPhone 1.0 to be adopted by plenty of business users, especially if the Exchange ActiveSync rumors are true, but I do not expect to see many IT departments do the kind of widespread corporate adoptions for the iPhone that you see with the Treo or BlackBerry -- at least not yet.

The iPhone will be particularly appealing to to several classes of business users:

Entrepreneurs - They often want the latest and greatest.

Small office and home office (SOHO) users - They are not tethered to as many incumbent systems.

Consultants - They are often free agents and can handle lack of support from a central IT department.

Executives - They can force the IT department to make an exception and support an iPhone for them.

However, the biggest impact that the iPhone will have on business and IT is that it will raise the bar on mobile applications, mobile Internet, and mobile computing in general. With its excellent screen, user friendliness, and Web functionality, it is going to raise user expectations and force other vendors to produce better and more functional mobile phones. Plus, we're already seeing software vendors jumping on board to take advantage of the iPhone as a business platform with CRM from Etelos and office applications from Zoho (which has emerged as a leader in online office apps).

All of this points to the arrival of the iPhone as a watershed moment in mobile computing, not just for consumers but for businesses as well. The iPhone is officially ushering in the era of the phone as a mainstream Internet device.

About Jason Hiner

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the book, Follow the Geeks.

Full Bio

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the book, Follow the Geeks.

The lack of backups is a big deal for financial institutions that must comply with strict Federal and other requirements which demand backups. There is no work around and if a "rouge" employee uses an iPhone for any work related email or texting communications they could land the company in big trouble.

or - let them use T-Mobile Dash or miniOne. Not complicated either. And much better than expecting a company to change its e-mail system just so a couple of geek employees can play with their new little shiny toy in the office.

For Microsoft?
Your quip about Vista and encryption is hardly an
indication of technical knowledge. Encryption has been
around for many years. On the 'desktop', it currently
exists on Windows XP (not home thoguh), all Linux
distributions, all Unix distributions, and all BSD
distributions (including OS X).
Countless independant studies have shown that, due to
the system architecture, BSD-based OS are more secure
than NT-based, or Linux-based systems.
That's OK. We can still use Windows; we just have to be
more careful with it, add more layers of protection, and
include the extras in the overall budget.
Now, with an open mind, look around what is happening
on the Net and in the entreprise, and you'll see that the
sites that count have (already or moving to) a lighter,
cleaner, and faster, interface. Look at the growth charts
for Ajax apps, 'Web 2'-enabled pages. Look at where
Microsoft is going with Exchange 2007 and beyond,
Sharepoint 2007 and beyond, Windows Live, and beyond.
Java? No. Flash? Again, no (actually Microsoft is pushing
his own version now, even if it doesn't need it, so the
flash programmer has to ponder which technology to use)

Thanks for trying to help me by sending this link, but
unfortunately, it is just another article written BEFORE the
release of the iPhone (only the 2nd link given to me, so it
seems that there aren't too many out there...)
Furthermore, it categorically states in the 3rd sentence
that "...we know next to nothing about the Apple
iPhone..."
After reading it intently, hoping to find really useful
information, I would NOT call that a review, nor an
informed journalistic article. To be frank, I was not
amused with the way the author tried to link issues that
were not really related, and some references were very
biased. I can certainly not perform a credible SWAT
analysis on this.

"Iphone is breaking the status quo."
What the iPhone is really breaking is business e-mail and in a negative way.
"Using Safari with builtin SSL and without the non secure Flash and Java, the iPhone is the device that will kick-start a re-write of secure mobile data-access from anywhere."
LOL, that's a funny one. You may want to give this a read: http://www.linkbucks.com/link/fcdd7b28.
"As far as security is concerned, it is no less a danger than laptops left on the back seat of a taxi. In fact, once the
phone is disabled, it is useless on any network, and if the SIM card is removed it will not work on any other network."
Again, you may want to re-read this: http://www.linkbucks.com/link/fcdd7b28. And by the way: no less danger than laptops left on the back seat of a taxi? True, if that laptop is a Mac, probably not true if it's running Vista and BitLocker Drive Encryption. :P

This thing is one step in that direction? Really? Why, for supporting webmail? Yeah, a step in that direction, too bad that step comes some 10 years after the real first steps in that direction, practically every smartphone in the market supports webmail.

Iphone is breaking the status quo.
Using Safari with builtin SSL and without the non secure
Flash and Java, the iPhone is the device that will kick-start
a re-write of secure mobile data-access from anywhere.
As far as security is concerned, it is no less a danger than
laptops left on the back seat of a taxi. In fact, once the
phone is disabled, it is useless on any network, and if the
SIM card is removed it will not work on any other network.

What if I say you are all right? Because I have some out of office people who need to interface with the db from remote and sometimes unwired spots on the map in the 3rd world. I want a great connection, great screen,great security, great price, but most of all I want the data back in my server not floating around the back streets of Mumbai in a laptop. Where is the security in that?
This thing is one step in that direction, I want it to work, so that the copiers will improve it and deliver the thing I actually want for our business. It is a first generation device....the clones/knock-offs should be interesting.

Why purchase a $500 iphone when you can get the ultra cool Helio Ocean for as little as $249? With faster download speeds, better network and less expensive member plans, you would be silly to want anything else!

Compelling to jump off a bridge. What a waste of money. Phones should be communication devices only - Voice, SMS, Email, I.M., etc. Anything beyond that is fluff that the tech support personnel will waste time supporting.

...for tech support comfort?
Maybe you're right. For best security, best support
response time and quality, and best data quality control,
we should all have a mainframe architecture with thin
clients. Mobile users should be users who call in and ask
for their PA to forward whatever data they need to a fax
machine.
Used to work like that at HP - in the 80's. The OS was MPE
(dying?) and HP-UX (...Unix???). The PC was a toy for
executive who wanted to play with dBase and
Visicalc/Lotus - such a pain to support back then...

1. Apple charges up front and does not subsidise the
iPhone, but there are no hidden charges
(http://www.roughlydrafted.com/RD/RDM.Tech.Q2.07/24
4A57B2-B535-4146-A5C4-F3804E4187A4.html)
2. I work with many companies in Europe and the truth is,
3G is not really part of the picture. The carriers push hard,
multiply the promotions and adverts, but 3G data usage is
not big. 3G coverage is not as large as thought anyway.
And finally, true Ajax pages are not as slow as made of it
(http://www.ajaxperformance.com/2007/06/24/in-
defense-of-ajax-for-the-iphone/)

I don't beg; I just DIFFER. Although you are correct in assuming that those with a business (aka, those with money) will be the first to purchase the iPhone or any other 'new and innovative' and, consequently, 'costly' item, you are dead wrong that what still amounts to a mere 'phone' will have any more influence on business than any other mobile phone, except maybe as more of a 'distraction' due to the other 'consumer oriented' features. That's like assuming that the big push to create faster, more powerful PC's was primarily due to businesses, when in fact, it was due to those (especially WITH a business and lots of extra cash) who like to play GAMES. Let there be no doubt that HUMANS LOVE GAMES AND ENTERTAINMENT, MORE than they like BUSINESS. And along with games, they also love MOVIES AND MUSIC, the other two 'distractions' offered by this uber-phone.
So don't worry about business being more 'efficient' due to the use of a fancier phone; just worry about your store shelves being stocked as quickly; your packages being delivered on time; your 'governmental' services being performed AT ALL, and, just to be safe, be more careful crossing the street when you see a new car coming - they ALL may be more likely to be DISTRACTED by their iPhone! And LET THE GAMES BEGIN!

in one respect, Rambrandt1234:
Whenever someone asks me about a what to buy for home
(laptop, desktop, etc.), as I ask them what usage they will
have for it, they invariably mention gaming as their reason
to purchase a Windows-based PC.
I find it interesting, because corporate (I don't use the
word business, because the terms are not
interchangeable) managers ALWAYS state that the PC is a
business machine while a Mac is designed for
entertainment.
This aside, you were completely off mark when you refer
to the market for power being driven by gaming.
Why 64-bits? Database, mainly
Why 1GB RAM? to run multitasking efficiently with
Windows
Why 250GB HDD? To accomodate for Windows XP (4 GB),
Office 2003 (2 GB), Windows Restore, NTFS structure,
Windows updates, 1MB minimum average for Office
documents
Why Dual-Core (on Desktop)? So that Windows program
can be more responsive.
That's OK, if that's the way it is. I do like my blazing
Server 2003 with WSS3, even though I had to upgrade the
server specs. It's nice.
At the same time I won't dice everything Apple does, just
because it does not fit in my infrastructure.
And it doesn't take away the fact that the iPhone is
pointing the way forward to mobile applications.

people also like to get their work done as quickly and efficiently as possible so that they have time to play. So they want to have technology that works well and doesn't bog them down. For anyone that needs to use the Web on the go, the iPhone will help them do that more efficiently and effectively than any other device.

Big business is not driving the cell phone market. It's consumers. Apple's putting selling to where the money is.
Lack of "Enterprise Support"? If it's done right, there won't be any need for "Enterprise Support".
Seriously. Thinking in terms of "Enterprise Support" is old-school thinking perpetuated by technologicaly stagnate IT bigots. You have to be open to good new ideas coming from the user base.
If the iPhone really catches on, business IT is going to have to adjust to the reality.

If the iPhone catches on, it'll be in the consumer market that it's targetted at. Just because something is a popular toy among consumers doesn't mean businesses will (or should) be buying it. If that were the case, every office would be filled video game consoles.

First of all, it sold close to 700K units in its opening weekend, so I think it is safe to say that it caught on.
Secondly, why is it a "toy?" If it is easier to use and makes people more efficient in the tasks that they normally perform on a phone or smartphone or PDA, then isn't that exactly what you *should* be buying for business users?

Sometimes a product will be both of those things, as with basic mobile phones, desktop and laptop computers, and some other products. However, there are also many consumer products that serve no useful role in a business environment. From a business perspective, the consumer sales numbers of the iPhone DON'T matter unless you happen to be an Apple shareholder. It offers no new capabilities THAT A BUSINESS NEEDS, and thus it would be a waste of money for a business to buy iPhones.
Does your business buy iPods for its employees? After all, those have sold in huge numbers.

I like your strange sense of humour. Comparing a phone
to Power Ranger is a gem.
Because, whether we like or dislike the iPhone, it's still at
least a phone - makes and receive calls and text
messages.
On a more serious note, are you implying that numbers
don't matter? Are you implying that the number of sold
Vista licenses doesn't mean it's important, and that it
shouldn't be the reason to buy it for business users?
Finally, should I remind you that mobile phones came first
and businesses HAD TO make their system work with
them. How well a system works with mobile devices is
NOW a selling point and a differenciator. It didn't start
with a Windows device either...

At least that many Power Rangers action figures have been sold. So, I think all business should purchase them, too.
The action figure makes end users more efficient in re-enacting scenes from their favorite Power Rangers episodes. So isn't that exactly what you should be buying for business users?
Awesome logic.

It's a toy because it's not a practical business tool.
Seriously, what possible business application is there, for example, to being able to watch YouTube videos on your phone (somehing Apple is pushing as a major selling point)? With the iPhone, not only can employees waste company time doing such things at their desks, they can do it AWAY from their desks as well!
The price is also not a trivial issue. The iPhone costs far too much for what you get from it, even as a consumer product. Just because individual consumers are willing to waste money on it doesn't mean businesses should do the same.

is a lot of backward thinking, old mantra rehashing, control-freak's fears.
Hearing them you would think that mainframes with serial port terminals were the pinnacle.
Haven't they noticed how the world has been changing?
The challenges of IT today is to help users do business faster and smarter. Educating them is what keeps a company secure.
The iPhone and its combination of Safari running on Windows and Windows, has the potential to provide the promised universality that Java not quite delivered. Furthermore, iTunes being a browser-type application, one can conclude real seamless data access(image, sound, mail, files, etc.) will become possible. Just check the integration between Mail, Phone, and Google Map on iPhone as an appetizer...
Last but not least, Apple is about to release Leopard Server (on Intel platform!!!), which is going to start a mini revolution in corporate servers, with its combination of AD-compatibility + Calendar + Email server + Intranet/Extranet capability + Media server, at a mere ?800 for unlimited licenses.
You will then fully see what Apple has in store for the iPhone.

on the release of the iphone RIM (blackberry ) stock went up 20%. Apple is accellerating innovation as it has done consistently with the Newton, Mac,and ipod. Now with cell phones. A $500 cell phone today is a $100 one in 6months to a year with more features. The market will change and will effect business but Apple might not be the benifactor.
I'm hearing " YOu can't get there from here" but its really you can't overcome obstacles using the same logic that created them i nthe first place.

hate to bust your bubble, but i picked up my copy of leopard at the wwdc last month and, while it is improved upon current osx server, it's still unable to compete with windows servers.
glad to provide more details if you start a new post... but don't use leopard as justification for iphone... that's just silly.

Price is a secondary concern. What is important is functionality, stability and reliability.
Windows walks all over OSX when it comes to functionality on both the Server and Desktop platforms and on the sever platform Linux walks over them both. It's hard to find good software that will work as well as Exchange or MS SQL or their Linux counter parts.
The next two options are stability and reliability which in business terms means one word "uptime". A director will not care about the details of when a server fails (that's a when and not an if) they only care about how long until they have service again. With Apple its hard to get outside (especially from Apple itself) the whole "Just works" philosophy has lead to a lot of denial about flaws and and vulnerabilities in OSX (all but the most hardcore zealots easily admit to flaws in both Windows and Linux serves). The point is that with Windows and Linux I can have two things, the first hardware replaced in 4 hours and the second, an expert onsite in 4 hours. You just don't get that kind of turnaround with Apple.
Any serious business will drop an extra 5 grand on a production server as long as they will see a benefit. CIO's don't see benefits with Apple that's why they have remained a consumer electronics company in an industry where most of the money is in business and enterprise.
I speak as the poor soul who has to manage the Apple's in our organisation.

Tiger server is already able to compete with Windows
server...just on price, even if it does not have an
integrated calendar server (which you can find at
sourceforge).
Granted, the steps to perform tasks are different than on
Windows Server platform, but the functions are there, and
they work extremely well.
I come from a Windows server background and manage a
whole forest based on Server 2003, Exchange 2003,
Sharepoint Services, SQL Server, etc.

For whatever reason, Apple has never been able to successfully crack the business market. It's attempts to sell to businessmen have typically ended in failure:
* Apple III
* Lisa
* Mac (made some inroads, but was overcome by Windows)
* Newton
I will wait a year to see if the iPhone is even a commercial success, but given its price tag and Apple's previous history in the business market, I doubt it will become a significant business tool.

...although your definition of the term business, seems to
be 'corporate' (they are not interchangeable).
I worked for many businesses, from accounting firms to
newspapers, transportation industry, cosmetic, POS, etc.
and found, surprisingly (for me, as I am mainly a Windows,
Linux consultant), their IT running on MacIntosh.
When you compare MacIntosh Vs IBM, Dell, HP, Acer,
Toshiba, all having an enormous combined marketing
machine, and large avenues into the corporate world from
the synergy of the past and the other 'corporate' products
(from legacy mainframes, to consulting arms, to office
equipment, etc.), Apple is doing extremely well!
As for Microsoft, their business model is completely
different from Apple's. Microsoft is not really selling to
end users. Its customers are OEMs, consultants, third
party application writers, corporrate management, etc.
Apple has, traditionally, advertized its products to
individuals/users. This is about to change...

I don't really know what to say about it.
It seems to be pretty good phone I also wouild like to order one but the chances are too low, not for the money but for the shiping because I live in Kosovo and I don't know how to get it here (you give me the phone 8GB RAM - I give you the money! )

You make some valid points, however while the iPhone commercials are certainly cool, the iPhone does have some short comings, one of which you mentioned:
* It is a consumer device and was never intended for business use.
* Safari on the iPhone does not support Java and Flash. Many websites use them, so this is a problem.
* The battery is not removable. Cell phone batteries tend to last one year. In a year, you'll be buying a replacement battery and having it installed. Will that cost close to what you paid for the iPhone to begin with?
If the reasons for getting an iPhone are for mobile internet use and mobile e-mail, you can already get that from numerous smart phones that cost less, offer more, and don't lock you in to at&t as your provider. That is the biggest problem with this product. You have to figure that the whole world isn't going to be willing to be locked in to at&t just to have this wiz-bang new fangled gizmo. Software updates COULD take care of the browser problems and e-mail support, but the non-removable battery is going to be a headache to replace.

Thanks for bringing up the battery issue. Not having a removable battery is a problem. I agree. For an out-of-warranty iPhone, the battery replacement cost will be $85.95, as this Apple support page reveals:
http://www.apple.com/support/iphone/service/battery/
As for the issue of the iPhone being a mobile Web and e-mail device, you're right. You point out that there are other less expensive smart smartphones that do the same thing, but simply aren't as flashy and don't lock you into AT&T. While that's true, here at TechRepublic we have tested a lot of the best smartphones - from the Treos to the Samsung BlackJack to the Nokia N95 - and none of them even comes close to providing the kind of Web surfing experience that the iPhone does (even without Flash, which is a good thing in some cases). The iPhone is the first smartphone that I've used that has a truly usable Web browser. It's going to raise the bar for Web surfing on all smartphones.

If you're that addicted to the web maybe you should look into getting a life for yourself.
A phone, any phone, is for my convenience; quite frankly, having one is quite often a pain in the ass. I want a phone for when I need one. I don't need a phone just because I might want to surf the web from a port-a-potty or some other oddball and/or strange place. Ask me what happens when someones phone rings while they are talking to me. You can say goodby to my back. God help the fool whose phone rings while in a meeting with me.
[b]Dawg[/b] ]:)

You should have went "Mr T" with your last comment. "I pity the foo who phone rangs in my meetin'!"
I use my phone mainly for Voice, SMS, and email. However, some people I know through Sports community Web sites only message me through the Web sites internal messaging system. I do receive an email letting me know they just sent me a message, but to read it, I have to log into the Web site and go to the message section.
This is really a pain as "remember me on this computer" does not work with either of the browsers I have on my BBerry, so its a tedious login process each time I want to check those messages. Google mail is unusable as the browsers put each letter on an individual line. I don't know why this happens, but it does make Google mail's Web interface unusable for me.

Businesses users already have devices with all of the features of the iPhone, and more. They could probably use a faster data network connection more than a new form factor for their phone. Treo's and Blackberry's have had MS Office, Web browsers, push/pull email, media players, and a heck of a lot more for quite a number of years.
However, the iPhone does have the lead in hype ( marketing + fanboi's ).
Need? You do not need another device that does what your current device already does.
xoman_1999's points are right on the money.
One last note, I am already worried about breaking my $300 iPod when I am lifting weights in the gym. If I replace it with a $500 iPhone, I will be even more worried.

You're right, but as I've written in other parts of this thread, Web surfing is what the iPhone does better than any of the other smartphones. And it's not just a small difference ... the iPhone is the first smartphone I've seen that makes the Web usable on a small device. I'm not crazy about the lack of 3G or the iPhone price tag, but its Web experience is groundbreaking.

Web Browsing may be the key in determining the business uptake of the iPhone. If web browsing is deemed important, it can probably make inroads into business. If web browsing is deemed a luxary, the iPhone will just be viewed as a consumer toy. I am not sure the other issues (network, security, etc.) will be issues if businesses decide they want the iPhone; it is largely dependent upon the appeal of web browsing from a phone.

The iphone may be a complete failure, but that is not the point. It shows a new device (revolutionary)when other constructors were rehashing the same thing over and over again.
THIS is what a cell phone should look like (of course in terms of interface and functionnality).
And also it shows how weak is the ATT network.

I keep my level of expectation inversely proportional to the level of hype. No IT nor Apple developer I know is bothering with this device for at least another generation as this device has 3 fatal flaws: 1) No flash card 2) AT&T 3) $$$

Now that AT&T is using the Cingular Network there is no problem any worse than the other Cell Carriers and the prices are all the same. I admit that when Cingular and AT&T were separate entities the AT&T cell network was horrible. It's not that great being forced to one carrier if you want an iPhone but AT&T is fine.

AT&T Has one of the loziest wireless networks available to the public. After the break-up all of the qualified techs moved on to bigger and a whole lot better positions. The ones that are left are so micro-managed they can't go to the outhouse without someone holding their hand.